<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The degree of increased indebtedness in the Western Balkan countries is generated by increasing consumption in terms of increased economic growth and structural reforms. Although these countries have shown an increase in exports and foreign direct investment over the past few years, the current account deficit remains high, especially in the ratio between external debt and GDP, which is not only high but at the stage of growth. Also, as domestic financial markets are underdeveloped, these countries are to a large extent exposed to an increase in the price of foreign borrowing. The current borrowing policy continues with increasing investment in non-productive consumption, which requires renewed borrowing. The presentation of debt trends, analysis and comparison of external debt of these countries show relevant guidelines in the selection of an adequate economic policy that would enhance the competitiveness of this part of the Balkans. Also, a comparative analysis of the indebtedness ratio will especially assess the state of indebtedness in Serbia, the structure and the movement of external debt towards international financial institutions. The comparison in this paper is made using standard indices of indebtedness based on the data obtained from the national statistical institutes and international financial institutions.</p></abstract>

The degree of increased indebtedness in the Western Balkan countries is generated by increasing consumption in terms of increased economic growth and structural reforms. Although these countries have shown an increase in exports and foreign direct investment over the past few years, the current account deficit remains high, especially in the ratio between external debt and GDP, which is not only high but at the stage of growth. Also, as domestic financial markets are underdeveloped, these countries are to a large extent exposed to an increase in the price of foreign borrowing. The current borrowing policy continues with increasing investment in non-productive consumption, which requires renewed borrowing. The presentation of debt trends, analysis and comparison of external debt of these countries show relevant guidelines in the selection of an adequate economic policy that would enhance the competitiveness of this part of the Balkans. Also, a comparative analysis of the indebtedness ratio will especially assess the state of indebtedness in Serbia, the structure and the movement of external debt towards international financial institutions. The comparison in this paper is made using standard indices of indebtedness based on the data obtained from the national statistical institutes and international financial institutions.

The Impact of Debt on Economic Development of the Western Balkan Countries

Economic Themes

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

{"article-title":"The Impact of Debt on Economic Development of the Western Balkan Countries"}

The degree of increased indebtedness in the Western Balkan countries is generated by increasing consumption in terms of increased economic growth and...

The Impact of Debt on Economic Development of the Western Balkan Countries

Article Category: Review paper

Published Online: Dec 16, 2020

Page range: 363 - 379

Received: Apr 21, 2020

Accepted: Sep 17, 2020

DOI: https://doi.org/10.2478/ethemes-2020-0021

Keywords
external debt, public debt, competitiveness, economic growth, the Western Balkans

© 2020 Mehdija Ćosović, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

The Impact of Debt on Economic Development of the Western Balkan Countries

Article Category: Review paper

Published Online: Dec 16, 2020

Page range: 363 - 379

Received: Apr 21, 2020

Accepted: Sep 17, 2020

DOI: https://doi.org/10.2478/ethemes-2020-0021

Keywordsexternal debt, public debt, competitiveness, economic growth, the Western Balkans

© 2020 Mehdija Ćosović, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
external debt, public debt, competitiveness, economic growth, the Western Balkans